Secured and Unsecured Loans types are available on this website today.
When discussing loans, they can be placed into two categories, either unsecured or secured loans.
Secured loans are offered by financial institutions who in return request a piece of collateral from the borrower.
Collateral is defined as any asset that holds substantial value.
Properties are the most common types of collateral while other types may include cars and stocks.
Get Secured and Unsecured Loans
If the borrower fails to re-pay what they owe on their secured loan then the assets they opted for collateral are seized by the lender to make up for the default payments.
Unsecured loans are approved for borrowers using their credit rating only.
Usually borrowers who apply for unsecured loans either do not own any valuable assets or do not want to put up any of their assets for collateral.
If borrowers fail to re-pay their unsecured loans lenders will not have any assets to seize however, they may use other methods to collect payment and they will wreak havoc on the borrower’s credit score.
Comparing secured and unsecured loans
It really depends on the borrower and their own financial situation.
For example, if a particular borrower would like a loan that will help build and strengthen their credit, then applying for an unsecured loan is their best option.
If the person applying does not have property that has equity in it, then they will not be able to get a secured loan.
They will have to apply for an unsecured loan instead.
Unsecured loan values are normally lower and may have a maximum amount of 25,000.
For the person that has a property with equity in it, they are in the great situation were they can choose from either a secured or unsecured loan.
With a secured loan, the value can go as high as £2M, but this is dependent on the equity in the property and the income of the applicant, to make sure they can service the repayments.
Secured loans do not require you to have a great credit score either, but unsecured loans, especially with higher amounts, will require a good credit history.
At LocaLoans it is our mission to provide our customers with the best secured and unsecured loan options available.
Apply for a new secured and unsecured loans agreement with us using this website today and get approved in principle within a few hours!